Singapore, long known for its stability and business-friendly environment, has become a go-to destination for family offices across Asia and beyond. As these wealth management entities flock to the country, they’re bringing with them not just assets, but a need for financing new investments. EquitiesFirst, a global firm specializing in equities-based financing, could be an attractive option for family offices with illiquid assets looking to free up strategic capital in the near term.
The Rise of Family Offices in Asia
Since 2017, Singapore has seen a sevenfold increase in the number of single-family offices based in the country, increasing to over 700. This growth isn’t happening in a vacuum. It’s part of a larger trend across Asia, where the accumulation of wealth has accelerated at a breakneck pace.
Consider this: China’s gross domestic product, measured by purchasing power parity, surpassed that of the United States in 2016, and according to the International Money Fund’s most recent data, it’s now 22% larger.
Meanwhile, the Association of Southeast Asian Nations has become the world’s sixth-largest economy. Perhaps most tellingly, the Wealth-X Billionaire Census reported a 29.2% surge in Asia’s billionaire population beginning in 2018, and as of 2023, the region is home to more than a quarter of the world’s billionaires.
This concentration of wealth has led to a corresponding boom in family offices, with the number in the Asia-Pacific region increasing by 44% between 2017 and 2019, according to a report from the Economist Intelligence Unit and DBS Bank. These offices, dedicated to managing investments and trusts for a single family, are increasingly considered the vehicle of choice for Asia’s ultra-high-net-worth individuals. Globally, there are now over 10,000 family offices, with at least half established in the past 15 years. Collectively, these offices manage roughly $5.9 trillion in assets.
Why Singapore?
There are several reasons Singapore appeals to family offices. The country offers a clear and nonconflicting regulatory framework, a reputable judiciary system, and a stable political environment. It ranks first globally in political and operational stability and is the fourth-largest recipient of foreign direct investments worldwide.
But it’s not just about stability. Singapore has actively courted family offices through policy initiatives. The introduction of the Variable Capital Company structure in 2020 was a game changer, offering tax advantages and privacy protections that are particularly attractive to family offices.
The Singapore Economic Board and Monetary Authority of Singapore have created the Family Office Development Team to enhance Singapore’s competitiveness and provide a better operating environment for family offices. This includes regular policy reviews, professional training initiatives, and efforts to build a strong family office community.
Moreover, Singapore’s strategic location makes it an ideal base for accessing opportunities across the Association of Southeast Asian Nations region. The country’s multicultural environment facilitates connections across the diverse Asian market. This geographical advantage is complemented by a deep pool of talent, with over 3,000 startups, a global network of 500 investors, and more than 200 incubators and accelerators.
EquitiesFirst and the Economics of Family Offices
Setting up a family office is no small undertaking. Typically, it’s justifiable for families with assets under management exceeding $100 million. The annual cost of running a family office can surpass $1 million, with key operational expenses including salaries, office rentals, and professional fees.
Despite these costs, family offices are targeting significant growth. Over one-third aim for growth rates above 10%, with optimism particularly strong in India and China, where more than 70% of family businesses expect double-digit growth through entering new markets and expanding into high-growth sectors.
But these approaches require family offices to utilize liquid capital rather than rely solely on the value of their securities. EquitiesFirst enables family offices to free up capital financed against the value of their publicly traded securities.
For family offices, especially those in the early stages of setting up in Singapore, this model offers several vital advantages.
Many family offices hold significant stakes in public companies, often tied to their family’s business legacy. EquitiesFirst’s financing model allows them to access liquidity while retaining long-term exposure to these strategic holdings. The liquidity provided by equities-based financing can be used to diversify into new asset classes or markets, a crucial consideration for family offices looking to spread risk and capture new opportunities. And unlike traditional bank financing, which can involve lengthy approval processes, EquitiesFirst’s model focuses primarily on the value of the pledged securities, allowing for quicker access to funds at favorable rates, usually between 3% to 4%.
In a move that underscores its commitment to serving the growing family office sector in Asia, EquitiesFirst recently appointed David Oh as executive director. Based in Singapore, Oh will be responsible for building and managing relationships with South Korean clients, reporting into the wider Asia Group. With over 15 years of experience in investment banking and technology finance, Oh brings expertise in capital markets and investor relations, particularly in managing assets based in South Korea and Singapore. Before joining EquitiesFirst, he advised on Delivery Hero’s $4 billion acquisition of South Korean food delivery app owner Woowa Brothers, one of the largest South Korean M&As in recent history.
The South Korean Connection
A notable trend within the broader movement of family offices to Singapore is the increasing number of South Korean family offices setting up shop in the country.
South Korea’s ties with the Association of Southeast Asian Nations have deepened steadily since signing a free trade agreement in 2005. Today, ASEAN is Korea’s second-largest trading partner and investment destination. Many Korean businesses see Singapore as a springboard to opportunities in the wider ASEAN region.
South Korea has one of the highest inheritance tax rates in the developed world, with rates potentially reaching 50%. In 2020, following the death of Korean Samsung patriarch Lee Kun-hee, his heirs had to sell approximately $2 billion worth of company shares to cover the inheritance tax.
By contrast, Singapore has no inheritance tax, making it an attractive destination for wealth preservation. And while South Korea plans to introduce a capital gains tax in 2025, Singapore doesn’t levy capital gains tax.
Recent political developments in South Korea, including the landslide defeat of a party seeking to reduce inheritance taxes, may have further increased the appeal of Singapore’s stable political and economic environment.
Korean family offices are now leveraging Singapore’s venture capital corporation structure to access a wide range of global investment opportunities. For instance, AIP Investment Partners, part of the Seoul-headquartered AIP group, uses the VCC platform in Singapore to invest in Korean startups in the growth stage.
The Broader Impact
The growing relationship between family offices and firms like EquitiesFirst is part of a larger trend reshaping Singapore’s financial landscape. As more wealth flows into the country, it’s catalyzing the development of a sophisticated ecosystem of financial services tailored to the needs of ultra-high-net-worth individuals and their family offices.
Family offices in Singapore are increasingly engaging in coinvestment opportunities, philanthropy, and even startup incubation. The liquidity provided by equities-based lending can fuel these activities, potentially accelerating innovation and economic development across the region[1] .
